Pensions and Other Postretirement Benefits

Effective January 1, 2018, PPG adopted ASU No. 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." See Note 3, "New Accounting Standards" for more information.

Service cost for net periodic pension and other postretirement benefit costs is included in Cost of sales, exclusive of depreciation and amortization, Selling, general and administrative, and Research and development, net in the accompanying condensed consolidated statements of income. All other components of net periodic benefit cost are now recorded in Other charges, except for pension settlement charges, in the accompanying condensed consolidated statements of income.

The net periodic pension and other postretirement benefit costs for the three and six months ended June 30, 2018 and 2017 were as follows:



	Pension
	Three Months Ended June 30						Six Months Ended June 30
($ in millions)	2018			2017			2018			2017
Service cost		$8			$8			$16			$17
Interest cost	24			25			48			49
Expected return on plan assets	(38		)	(36		)	(76		)	(70		)
Amortization of actuarial losses	16			19			32			38
Pension settlement charge	—			—			—			22
Net periodic benefit cost		$10			$16			$20			$56



	Other Postretirement Benefits
	Three Months Ended June 30						Six Months Ended June 30
($ in millions)	2018			2017			2018			2017
Service cost		$3			$3			$5			$5
Interest cost	6			5			12			12
Amortization of actuarial losses	4			1			9			6
Amortization of prior service credit	(15		)	(17		)	(30		)	(30		)
Net periodic benefit cost		($2	)		($8	)		($4	)		($7	)

PPG expects its 2018 net periodic pension and other postretirement benefit cost to be approximately $30 million, with pension expense representing approximately $40 million and other postretirement benefit cost representing a benefit of approximately $10 million.

Contributions to Defined Benefit Pension Plans



	Three Months Ended June 30				Six Months Ended June 30
($ in millions)	2018		2017		2018		2017
U.S. defined benefit pension contributions		$—		$—		$25		$29
Non-U.S. defined benefit pension mandatory contributions		$5		$3		$10		$8

PPG made a $25 million voluntary contribution to its U.S. defined benefit pension plans in January 2018. PPG expects to make mandatory contributions to its non-U.S. pension plans in the range of $10 million to $20 million during the remaining 6 months of 2018 and may make voluntary contributions to its defined benefit pension plans in 2018 and beyond.

U.S. Non-qualified Pension

In the first quarter 2017, PPG made lump-sum payments to certain retirees who had participated in PPG's U.S. non-qualified pension plan (the "Nonqualified Plan") totaling approximately $40 million. As the lump-sum payments were in excess of the expected 2017 service and interest costs for the Nonqualified Plan, PPG remeasured the periodic benefit obligation of the Nonqualified Plan as of March 1, 2017 and recorded a settlement charge totaling $22 million million ($14 million after-tax).